It can be difficult to keep track of what stays on your credit report and for how long.
If you make a late payment on a credit card or loan, it can generally stay on your credit report for up to 7 years.
Here, we’ll look at what qualifies as a late payment and steps you can take if you make one or think you may make one to minimize the impact on your credit score.
What counts as a late payment?
An on-time payment is when you pay the minimum payment due by the due date. If you make a partial payment – for example, if your credit card’s minimum payment is $50 and you only pay $25 – that partial payment counts as a late payment.
Technically, any payment you make after the due date is late. However, with some lenders, a payment a day or 2 after the due date might not be reported to credit bureaus (though you may be charged late fees). Each lender has their own rules for when they report a late payment, but typically, if your payment is more than 30 days late, it will show up on your credit report.
Why are on-time payments important?
Your payment history is an important factor in determining your creditworthiness. It’s the largest factor in most credit scoring models, and for good reason – lenders like to see that you can reliably make payments according to the terms of your credit card or loan. A positive payment history can indicate you’re a lower-risk candidate for lending.
What if you make a late payment?
Sometimes, late payments happen. If you miss a due date, it can help to act quickly. If you missed a payment but have the funds, make the payment and contact your lender. If you think you’re at risk of missing a payment or making a partial payment, contact your lender so they’re aware. You may be able to work something out with them.
If you make a payment within 30 days of the due date, the late payment generally will not appear on your credit report. The longer you go without paying and the more payments you miss, the more it can affect your credit.
After 30 days, you won’t be able to remove a true late payment from your credit report, only a falsely reported one. It’s also a good idea to check your credit report periodically to ensure everything is accurate and that there are no erroneous late payments. As of 2023, you are now able to check your credit report for free every week from all 3 credit bureaus. This access helps monitor your credit more closely for any changes or inaccuracies.
Preventing late payments
Here are a few ways to prevent late payments.
Set up autopay: Most credit cards and loans will allow you to set up automatic payments from your checking account. This may ensure that you won’t miss a payment. Just be sure to keep enough in your checking account to cover payments you’ve set up.
Consolidate debt: Consolidating debt with a personal loan or balance transfer credit card could allow you to have all your debt in one place, simplifying payments. Having only one payment to keep track of may mean you’re less likely to miss one.
Set up alerts: Set up reminders so you know when to make payments.
Budget carefully: Making and sticking to a budget and tracking your spending may help ensure you have enough to cover the required payments each month.
Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.
